PARIS/ATHENS (Reuters) - Prime Minister Alexis Tsipras tried to reassure euro zone partners on Thursday that Greece would stick to an extended bailout agreement with its international creditors even as a war of words rumbled on between Athens and Berlin.
Tsipras used a visit to the Paris-based Organization for Economic Cooperation and Development, an inter-governmental think-tank, to make his case for a long-term restructuring of Greece’s debt while promising to implement agreed reforms.
“There is no reason for concern... even if there is no timely disbursement of a (loan) tranche, Greece will meet its obligations,” he told reporters.
“We are here in order for the OECD to put its stamp on the reforms that the Greek government wants to push on with and I believe that this stamp in our passport will be very significant to build mutual trust with our lenders.”
His soothing words contrasted to the tone of recrimination between Greece and Germany over austerity, relations between their finance ministers and demands for reparations over the World War Two Nazi occupation of Greece.
Greece submitted a formal protest to the German Foreign Ministry, accusing Finance Minister Wolfgang Schaeuble of having insulted his Greek counterpart, Yanis Varoufakis, further eroding a relationship that has been strained by Berlin’s tough stance on the Greek debt crisis.
Schaeuble denied having called Varoufakis “foolishly naive”, as reported by some Greek media, telling Reuters it was “nonsense” to say he had insulted the Greek minister.
Greek Foreign Ministry spokesman Constantinos Koutras told Reuters the complaint was about the general tone of Schaeuble’s remarks, questioning data presented by Greece and doubting its willingness to meet its commitments.
Recounting a private meeting with Varoufakis this week, Schaeuble told reporters on Tuesday in Brussels: “He said to me ‘The media are dreadful’. So I said: ‘Yes but the first impression you made on us was that you were stronger at communication that on substance. That may have been a mistake’.”
When journalists broke into laughter, Schaeuble continued: “Stop your silly laughter! So the idea that he was suddenly naive about communication, I told him, that’s completely new to me. But you never stop learning.”
Germany has taken the toughest line in insisting that Greece should receive no more bailout cash until it implements reforms agreed by its previous conservative-led government, and receives a positive report from the “troika” of European Commission, European Central Bank and International Monetary Fund experts.
Tsipras’s leftist Syriza party was elected in January on a platform of scrapping the bailout, reversing austerity and ending cooperation with the troika. But he was forced last month to request a four-month extension of the financial rescue to avoid bankruptcy and stop a run on Greek banks.
At the OECD, Tsipras said it was vital to restructure Greece’s debt mountain - which is equal to 178 percent of its annual economic output - so that Athens did not have to achieve “unrealistic and recessionary” primary budget surpluses of 3 percent of GDP this year and 4.5 percent in 2016 as foreseen in the bailout program.
Euro zone countries have made clear there is no question of writing off any of Greece’s official debt, but they are open to extending the duration of loans and granting a longer moratorium on interest payments if Athens implements required reforms.
The ECB agreed on Thursday to raise the limit on emergency lending assistance that is keeping Greek banks afloat by 600 million euros to 69.4 billion, banking sources said. The ECB has barred Athens from issuing extra short-term treasury bills that only Greek banks buy, arguing that this amounts to illegal monetary financing of the government.
A senior ECB policymaker rebuffed Varoufakis’s accusation that the central bank was asphyxiating Greece.
“It’s not because of the ECB that the Greek government has no access to markets,” German Bundesbank President Jens Weidmann said in response to a question from Reuters.
It was up to euro zone governments and parliaments to decide whether they were willing to increase their exposure to Greece and cover the Greek state’s financing needs, he said.
“This is less of a task for the Eurosystem (of euro zone central banks) than it has ever been.”
Additional reporting by Renee Maltezou and George Georgiopoulos in Athens, Michael Nienaber in Berlin, Paul Carrel and Maria Sheehan in Frankfurt; Writing by Paul Taylor; editing by David Stamp